Dear Bankruptcy Adviser,
I am going to marry someone who has filed bankruptcy. He gave up his house as part of the bankruptcy and came to live with me. His bankruptcy has since been discharged.
My house is all paid for, and I have no debts other than a car loan, which I can easily cover. I have an excellent credit rating and have never gotten into difficulties financially.
Will there be any problems for me once we are married?
This is an excellent question. It's smart to be concerned that your positive financial credit history could be affected by his negative one. I would suggest not putting him on any of your accounts for the foreseeable future. You might want to open up a joint checking account, but try to keep your finances separate until he has recovered his credit rating.
While your credit scores and credit history don't merge when you get married, there needs to be an effort to improve his credit. That way, if necessary, you can apply for loans together in the future. In some cases, joint loan applications can help you get better interest rates or loan terms.
Start out trying to improve his credit slowly. After you get married, open up a joint credit card for no more than $500. This will not expose you to a huge liability, and you are showing him some goodwill by using your good credit to help his less-than-perfect credit. You will also be able to monitor the use of the card as well as ensure the monthly payments are made.
Make sure the lender will report the new credit line to all three credit bureaus -- Experian, Equifax and TransUnion. There would be no benefit to him unless the new credit line and future payment history is reported to all three of the major credit bureaus.
Use the card every month, even if it is just to buy a slice of pizza and a drink. This way, he is showing monthly credit usage and a good post-bankruptcy payment history.
After six to 12 months, he can try applying for a credit card from the same lender in his name only. Using the same lender will make it easier to be preapproved for a card as they periodically check your credit throughout the year. Before he applies for the new credit card, make sure he confirms with the lender that he is eligible for an account in his name only. This preapproval will spare him from having the dip in credit made by a hard credit check only to not receive a card.
If the customer service representative taking the application can't guarantee your fiance/husband is eligible for a card and says, "I need to run your credit first," move on. You have told the representative he had a bankruptcy and has limited credit. A straight answer is available.
With your assistance, he will be able to recover from his bankruptcy much faster than most. Just be careful and move slowly.
Congratulations on the pending marriage.